Western Fair District: The boss at Southwestern Ontario's largest convention hotel says a proposed hotel at a proposed London casino would hurt the industry

London is upping the ante for downtown hotels if it approves a new hotel at Western Fair as part of a plan to turn the provincial slots lounge there into a full-blown casino, a prominent downtown hotelier warns.

And the idea of plopping a hotel on public lands at Western Fair District, one that would compete with private operators a stone’s throw away downtown, doesn’t go down well with a former city politician who sat on the fair board when it floated a similar idea about a dozen years ago.

“Good luck resurrecting that (hotel plan),” said Cheryl Miller. “We should not be competing with the private sector on public lands.”

Burnaby, B.C.-based Gateway Entertainment took over the province’s Southwestern Ontario gaming operations last month, except for its Vegas-style Windsor casino, as part of a shakeup by the Ontario Lottery and Gaming Corp., to fatten its bottom-line returns for the government.

As part of a $200-million regional expansion, Gateway will add more slots, bring in table games like blackjack, open new restaurants and a hotel to serve the London complex, spokesperon Carrie Kormos said.

That’s a dramatic change from what’s now at Western Fair District, with the private operator talking about a huge boost in the total number of jobs, adding 700 to the 300 already there now.

But it’s that last part — a hotel — that’s come as a rude surprise to Joe Drummond, general manager of the DoubleTree by Hilton, the largest convention hotel in Southwestern Ontario.

Hotel occupancy rates in the city have hovered around 60 per cent for years — and adding more rooms to the inventory won’t help, he said.

“When you look at our occupancy, it’s not the greatest — it’s not where we need to be . . . It’s definitely going to be more challenging for us and every other downtown property,” Drummond said Tuesday.

What Gateway plans for London is nothing like Ontario’s mega-casinos in Niagara Falls and Windsor, but more like its charity casinos in Point Edward and Brantford — the full-blown thing, but without the sheer scale. Compared to a horse raceway slots lounge, however, which is what Western Fair District — and other raceways in Southwestern Ontario — has had for a generation, the change would be dramatic.

The DoubleTree, which looms large in downtown London, a short distance from Western Fair, has 323 rooms and 30,000 square feet of meeting space. The hotel completed a $10-million renovation last year as it rebranded from Hilton to the DoubleTree by Hilton.

The neighbouring Delta London Armouries by Marriott, with 246 rooms, has also undergone substantial upgrades.

“We are still looking at improving our product. We’re not finished yet. But this could have an impact on our decision-making,” Drummond said of plans for the Western Fair District site.

An expanded gaming operation is welcome, he said, because it could help to draw more meetings and conventions to London by adding another attraction. DoubleTree and other downtown hotels already derive significant business from sports teams that play at Western Fair’s arena and from exhibitors at its trade shows.

But the planned casino, Drummond noted, won’t directly expand the hotel market. He noted the construction of a large hotel at Caesars Windsor casino had a negative effect on hotels in the border city.

“It almost collapsed the hotel industry there. Casinos usually do not bring overnight stays,” he said.

Kormos said Gateway is still working on plans for the casino complex, and will release more details this summer, but that it wouldn’t be a resort-style venue like Caesars Windsor or Fallsview in Niagara.

“It would be a hotel to support that property. Caesar’s probably has about 800 rooms. That’s not what we are talking about. It would be an appropriate size and we are not going to build something that is not successful,” she said.

A similar proposal for a hotel adjacent to the slots lounge was floated by Western Fair about 12 years ago. It also drew complaints from private operators and was eventually dropped, said Miller.

She noted the land where the casino is situated is owned by the city and leased back to Western Fair.

While the expansion of gaming may not get much pushback, Miller said the proposal to build a hotel as part of the casino could be very controversial.

Drummond said the city should be concerned with the economic stability of downtown hotels but also has a financial interest in the expansion of the gaming operation.

While city hall wouldn’t get revenue from any future hotels or restaurants at the proposed casino site, the city does get an annual cut of the gaming revenue from the province, as do all so-called ‘host’ communities with provincial gaming operations.

Private operator Gateway hasn’t fully tipped its hand yet, but here’s what’s known about its casino plans at Westerm Fair District in London:

A full-blown casino would replace the slots lounge there now, adding games such as craps, roulette, blackjack and more slot machines.

A hotel and new restaurants would be added.

The casino would fall short of Ontario’s Vegas-style border casinos. Instead, it would be more like its charity casinos in Point Edward and Brantford, the kind London voters rejected in a 1997 civic referendum.

Gateway plans to invest $200 million in the London and other Southwestern Ontario gaming operations it took over last month.

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